Drug price control plan will disrupt biotech ecosystem, expert says

National Cancer Institute scientist developing new drugs in the lab

Proposed drug price controls will disrupt the vibrant US biotech ecosystem, according to Vital Transformation CEO Duane Schulthess. He spoke during an online briefing yesterday for state biotech trade associations on new research on the bill’s effects, Good Day BIO reports.

According to Vital Transformation, revenues for a group of 20 price-controlled medications will fall by $82 billion in 2031 as the 12 businesses producing those medicines will lose an average of 55% of earnings.

PBMs unaffected by price controls

These losses exceed Congressional Budget Office (CBO) forecasts. As Europe’s example showed, politically driven bureaucrats will pursue prices below the maximum allowed by statute, regardless of the impact on the business, according to Schulthess.

However, while drug manufacturers earn less for their medicines, pharmacy benefit managers (PBMs)—the middlemen that seek discounts for providing therapies paid by insurance—are unaffected by the bill, and they are unlikely to alter their demands even if profits decline.

Antibiotics and rare disease therapies are in jeopardy

According to Schulthess, with reduced profits, investors will support less medical research, resulting in the abandonment of treatments for antimicrobial resistance and rare illnesses.

Just as Europe lost its biotech leadership to the United States in the 1990s, he projected that the U.S. sector will decline as China attracts all the investment.

Once all Democrats are well enough to attend and the bill is submitted, the Senate is anticipated to undergo several days of amendment suggestions in a mostly symbolic “vote-a-rama,” according to Nick Shipley, BIO’s chief advocate and executive vice president. According to him, Senate approval is likely as early as next week.

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